What is the definition of "foreclosure rate"?

Question

I've been looking up the number of foreclosures in my area and I keep running into reports of the "foreclosure rate," but with very few articles defining what that means. In fact, the only complete definition I found was

The foreclosure rate is the share of mortgages in some stage of the foreclosure process. (link here)

However, some other half-definitions of "foreclosure rate" that I found seemed to indicate that the rate is normalized by the number of homes, not mortgages, in an area.

What, if anything, is the official definition of foreclosure rate?

Answer 1

There is no official definition for foreclosure rate, since it is just the result of a statistical calculation like "percent of people that lose money flipping houses". It depends on who is crunching the numbers.

The page you linked to states that the rate is the "share of mortgages". On the other hand, studies by Attom Data give the numbers with respect to total "housing units". I take this to mean any house, whether it is mortgaged or not.

Answer 2

Traditionally in the US, banks speak of the foreclosure rate as the rate of foreclosure as a percentage of total loans. Historically in the US, this number has been around 4% to 6%. Some banks target riskier borrowers and their foreclosure would be higher.

In the 2008 crisis, some banks had foreclosure rates as high as 25% or higher. Some of those banks failed as a result.